Accounting - Study Mode
[#1656] If an effect of an error is cancelled by the effect of some other error, it is commonly known as
Correct Answer
(B) Compensatory errors
Explanation
Solution: If an effect of an error is cancelled by the effect of some other error, it is commonly known as Compensatory errors. A compensating error is an accounting error that offsets another accounting error. These errors can be difficult to spot when they occur within the same account and in the same reporting period, since the net effect is zero.
[#1657] The excess of purchase consideration over net assets of the transferor company acquired by the transferee company should be recognized as . . . . . . . . in purchase method.
Correct Answer
(C) goodwill
[#1658] The amount spent on unsuccessful patent rights is a:
Correct Answer
(C) Revenue expenditure (even though the amount is large)
[#1659] In order to determine the amount of sales, to which of the following records one should refer?
Correct Answer
(C) Journal
[#1660] . . . . . . . . is the account created in connection with internal reconstruction.
Correct Answer
(B) Capital reduction a/c